Gabelli Convertible & Income Securities Fund Reaffirms Its 8% Distribution Policy & Declares Second Quarter Distribution of $...
May 19 2016 - 9:16AM
Business Wire
The Board of Directors of The Gabelli Convertible and Income
Securities Fund Inc. (NYSE:GCV) (the “Fund”) reaffirmed its 8%
distribution policy and declared a $0.12 per share cash
distribution payable on June 23, 2016 to common stock shareholders
of record on June 16, 2016.
The Fund intends to pay a quarterly distribution of an amount
determined each quarter by the Board of Directors. Under the Fund’s
current distribution policy, the Fund intends to pay a minimum
annual distribution of 8% of the average net asset value of the
Fund within a calendar year or an amount sufficient to satisfy the
minimum distribution requirements of the Internal Revenue Code for
regulated investment companies. The average net asset value of the
Fund is based on the average net asset values as of the last day of
the four preceding calendar quarters during the year. The net asset
value per share fluctuates daily.
Each quarter, the Board of Directors reviews the amount of any
potential distribution from the income, realized capital gain, or
capital available. The Board of Directors will continue to monitor
the Fund’s distribution level, taking into consideration the Fund’s
net asset value and the financial market environment. The Fund’s
distribution policy is subject to modification by the Board of
Directors at any time, and there can be no guarantee that the
policy will continue. The distribution rate should not be
considered the dividend yield or total return on an investment in
the Fund.
All or part of the distribution may be treated as long-term
capital gain or qualified dividend income (or a combination of
both) for individuals, each subject to the maximum federal income
tax rate, which is currently 20% in taxable accounts for
individuals (or zero depending on an individual’s tax bracket). In
addition, certain U.S. shareholders who are individuals, estates or
trusts and whose income exceeds certain thresholds will be required
to pay a 3.8% Medicare surcharge on their "net investment income",
which includes dividends received from the Fund and capital gains
from the sale or other disposition of shares of the Fund.
If the Fund does not generate sufficient earnings (dividends and
interest income and realized net capital gain) equal to or in
excess of the aggregate distributions paid by the Fund in a given
year, then the amount distributed in excess of the Fund’s earnings
would be deemed a return of capital. Since this would be considered
a return of a portion of a shareholder’s original investment, it is
generally not taxable and is treated as a reduction in the
shareholder’s cost basis. Under federal tax regulations, some or
all of the return of capital distributed by the Fund may be taxable
as ordinary income in certain circumstances. This may occur when
the Fund has a capital loss carry forward, net capital gains are
realized in a fiscal year, and distributions are made in excess of
investment company taxable income.
Long-term capital gains, qualified dividend income, ordinary
income, and return of capital, if any, will be allocated on a
pro-rata basis to all distributions to common shareholders for the
year. Based on the accounting records of the Fund as of May 16,
2016, each of the distributions paid to common shareholders in 2016
would include approximately 11% from net investment income and 89%
from net capital gains on a book basis and does not represent
information for tax reporting purposes. The estimated components of
each distribution are updated and provided to shareholders of
record in a notice accompanying the distribution and are available
on our website (www.gabelli.com). The final determination of the
sources of all distributions in 2016 will be made after year end
and can vary from the monthly estimates. Shareholders should not
draw any conclusions about the Fund’s investment performance from
the amount of the current distribution. All shareholders with
taxable accounts will receive written notification regarding the
components and tax treatment for all 2016 distributions in early
2017 via Form 1099-DIV.
Investors should carefully consider the investment objectives,
risks, charges, and expenses of the Fund before investing. More
information regarding the Fund’s distribution policy and other
information about the Fund is available by calling 800-GABELLI
(800-422-3554) or visiting www.gabelli.com.
The Gabelli Convertible and Income Securities Fund Inc. is a
diversified, closed-end management investment company with $96
million in total net assets whose primary investment objective is
to seek a high level of total return on its assets through a
combination of current income and capital appreciation. The Fund is
managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors,
Inc. (NYSE:GBL).
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Gabelli Convertible and Income Securities Fund Inc.Laurissa
Martire, 914-921-5070
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